July  2015, 11(3): 933-949. doi: 10.3934/jimo.2015.11.933

Joint pricing and replenishment decisions for non-instantaneous deteriorating items with partial backlogging, inflation- and selling price-dependent demand and customer returns

1. 

Department of Industrial Engineering, Karazmi University, Mofatteh Avenue, Tehran, Iran, Iran

2. 

Institute of Applied Mathematics, Middle East Technical University, Ankara, Turkey

3. 

Department of Industrial Engineering, Tarbiat Modares University (TMU), Tehran, Iran

Received  August 2013 Revised  July 2014 Published  October 2014

This paper develops an Economic Order Quantity (EOQ) model for non-instantaneous deteriorating items with selling price- and inflation-induced demand under the effect of inflation and customer returns. The customer returns are assumed as a function of demand and price. Shortages are allowed and partially backlogged. The effects of time value of money are studied using the Discounted Cash Flow approach. The main objective is to determine the optimal selling price, the optimal length of time in which there is no inventory shortage, and the optimal replenishment cycle simultaneously such that the present value of total profit is maximized. An efficient algorithm is presented to find the optimal solution of the developed model. Finally, a numerical example is extracted to solve the presented inventory model using the proposed algorithm and the effects of the customer returns, inflation, and non-instantaneous deterioration are also discussed. The paper ends with a conclusion and outlook to future studies.
Citation: Maryam Ghoreishi, Abolfazl Mirzazadeh, Gerhard-Wilhelm Weber, Isa Nakhai-Kamalabadi. Joint pricing and replenishment decisions for non-instantaneous deteriorating items with partial backlogging, inflation- and selling price-dependent demand and customer returns. Journal of Industrial & Management Optimization, 2015, 11 (3) : 933-949. doi: 10.3934/jimo.2015.11.933
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Operational Quarterly, 26 (1975), 553-558. doi: 10.2307/3008214.  Google Scholar

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[17]

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[18]

to appear in Proceedings of the Institution of Mechanical Engineers, Part B: Journal of Engineering Manufacture, (2014), doi: 10.1177/0954405414522215. doi: 10.1177/0954405414522215.  Google Scholar

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[23]

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